Government funds turning the tides on wave technology

A world-first wave energy project to be undertaken in Perth by Carnegie Wave Energy has surged closer to development following the award of $9.9 million in funding from the Federal Government. Using Carnegie’s CETO technology, named after a Greek goddess, the grid-connected wave energy project will be constructed at Garden Island, about 5km offshore WA. CETO is a fully submerged technology capable of producing both renewable power and directly desalinated fresh water from ocean waves.
The government funding is part of the Australian Centre for Renewable Energy’s Emerging Renewables Program and has been bolstered by an additional $5.5 million grant from the WA Government’s Low Emissions Energy Development program.
The combined grants allowed the company to approve the Garden Island location for its first grid-connected project. WA Resources and Energy minister Martin Ferguson announced the Federal Government grant on May 1 at Carnegie’s Fremantle facility.
“With the government’s assistance through the Emerging Renewables Program, this $31 million pilot project will demonstrate the potential for Carnegie’s Australian-invented and owned CETO technology to provide up to two megawatts of energy to the electricity grid,” Mr Ferguson said.
“This technology not only has the potential to increase investor confidence in wave projects and [to] help unlock Australia’s untapped wave energy resource, but it could also produce zero emission desalinated seawater which, on a dry continent such as Australia, is a significant additional attraction.”
Based on a recently completed preliminary design, the project is expected to cost $31.2 million. It will generate Carnegie’s first power sales revenues through the trade of electricity.
The company reported that it had signed memorandums of understanding covering the supply of power from the project with the Australian Department of Defence and WA state-owned power retailer Synergy, and that power supply arrangements were expected to be finalised in the near future. “This represents the culmination of a lot of work and negotiation from Carnegie’s world-class team and we are delighted to have reached this outcome,” Carnegie managing director and chief executive Dr
Michael Ottaviano said in a statement.
Dr Ottaviano said that there was an enormous global demand from industry and government for a reliable wave energy technology, and that Carnegie and the CETO innovation were best positioned to capitalise on that demand.
A subsequent funding arrangement has also been secured with the Australian Special Opportunity Fund, a New York-based institutional investor managed by The Lind Partners, which will allow a maximum of $16.3 million to be advanced to support the project.
“We have been working with the core team at Lind for two years and that core team has viewed our operations and participated in previous Carnegie capital raisings,” Dr Ottaviano said.
“The [new funding] facility allows us to minimise dilution for existing shareholders by raising capital when there is strong share price momentum whilst maintaining maximum capital management flexibility.”
Under the agreement, Carnegie will receive $500,000 on execution, via a convertible security in the amount of $350,000 and a pre-payment of ordinary shares in Carnegie of $150,000. Lind will invest a further $175,000 each month for  has the ability to increase each month share subscription up to $450,000 at its sole discretion and under certain conditions. Carnegie stated that the arrangement with The Lind Partners would provide considerable financial flexibility and the ability to maximise the benefits of both of the recently issued government grants, as Carnegie continues to de-risk and commercialise CETO. Lind managing partner Jeff Easton said that the company was “delighted” to have the opportunity to provide funding to Carnegie alongside the Australian Federal and State Governments.
“Carnegie Wave Energy is on the verge of commercialising one of the few technology platforms that has the potential to help meet the world’s increasing energy demand in a sustainable manner,” he said. “I have been following the company closely for three years, visited their research facility and participated in their capital raisings. We are very optimistic about the company’s future and have great confi dence in the Carnegie Wave Energy team to meet the milestones ahead.”
The project will be constructed and commissioned next year, with first power due for delivery into the grid at the end of 2013. The facility will consist of an array of submerged CETO units, subsea pipelines to shore, hydraulic conditioning equipment and an onshore power generation facility.
Once completed, the wave energy project will offer the potential for an expansion to a 5 megawatt generation capacity. “The PWEP [Perth wave energy project] will use Carnegie’s robust, ocean-tested, independently verified and submerged CETO technology that converts wave energy into renewable electricity onshore,” the company stated.
The CETO technology has been developed during the course of 10 years, progressing through the technology innovation chain to the commercial demonstration phase. The project will provide the world’s first demonstration and verifi cation of a grid-connected, pre-production CETO wave
energy project.
According to Carnegie, the CETO system distinguishes itself from other wave energy devices by operating out of sight, anchored to the ocean floor. An array of fully submerged buoys tethered to seabed pump units move in harmony with the motion of the passing waves, driving the pumps which in turn pressurise water that is delivered to shore via a pipeline.
On shore, high-pressure water is used to drive hydroelectric turbines, generating zero-emission electricity. The high-pressure water can also be utilised to supply a reverse osmosis desalination plant, replacing the greenhouse gas-emitting electrically driven
pumps usually required for such plants.
CETO is environmentally friendly, has minimal visual impact and attracts marine life; it is fully submerged in deep water, safe from storms and away from breaking waves and beachgoers.
Carnegie stated that, at its initial small-scale size, the project was not a stand-alone economic investment. “Rather, [the project’s] aim is the demonstration of successful system engineering, operation and power sales,” the company stated.
“The project site provides an ideal pre-production test site due to its exposure to open, medium intensity wave conditions, its immediate proximity to marine support infrastructure and expertise, and security provided by its proximity to Australia’s
largest navy base, HMAS Stirling.” Carnegie has a formalised an ongoing relationship with the Department of Defence for the wave energy project. The project’s offshore location will be the same as that used for the successful CETO 3 commercial scale unit demonstration that took place in 2011.
Carnegie will immediately begin the detailed design work for the project, which will also involve carrying out further community consultation and seeking government approvals for construction and operation.
ASX-listed Carnegie has raised more than $45 million to fund its CETO technology, and has registered offices in Perth and in Dublin, Ireland.

 

By Jaimee Conn

One Response to Government funds turning the tides on wave technology

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